On the go: Members of public sector pension schemes who were victims of discrimination will be allowed to choose whether they accrued service in the old or new schemes, the government announced on Wednesday.
In a written statement to parliament, John Glen, economic secretary to the Treasury, said the proposals the government is considering to comply with the McCloud judgment will allow such choice for the relevant members.
A dispute brought by firefighters and judges in March 2015 – known as the McCloud and Sargeant cases – argued that by protecting older members from a downgrade to their defined benefit pension accrual, the government was discriminating based on age.
In a ruling handed out in December 2018, the Court of Appeal agreed that discrimination had taken place, and in June 2019 the Supreme Court refused the government’s application to appeal the court case, which marked the end of the legal process.
Transitional provisions took different forms, allowing older judges and firefighters to remain members of the old schemes, either until retirement or until the end of a period of tapered protection, dependent on their age.
The difference in treatment will, in due course, be removed for all members with relevant service across all the main public service pension schemes – not just those who have lodged legal claims, the government noted.
Mr Glen confirmed that since February relevant pension schemes have been conducting technical discussions with member and employer representatives to “seek initial views on the government’s high-level proposals for removing the discrimination”.
“Detailed proposals will be published later in the year and will be subject to public consultation. The government will welcome views on these proposals,” he noted.
Mr Glen also warned that the remedies could have an impact on the individual member’s tax position.
“If an individual’s pension circumstances change as a result, the government may also need to consider whether previous tax years back to 2015-16 should be reopened in relation to their pension,” he said.
Steve Webb, former pensions minister and partner at LCP, said: “Today’s statement shows the massive complexity of unpicking public sector pension reforms following the recent decision by the Court of Appeal.
“If the government goes ahead with its plans, complex calculations will need to be made for millions of public sector workers, including retired members, to help them decide which scheme would be of most benefit.”
